In its third-quarter 2012 results, Suntech says it will re-issue several of its previous financial statements after the completion of an investigation into a fraudulent security interest.
Earlier this year, the company began investigating a 554.2 million euro security interest received in connection with its investment in Global Solar Fund SCA, Sicar (GSF). It was later determined that the security interest did not exist and that Suntech had been a victim of fraud.
‘Accordingly, Suntech's audit committee of the board of directors and the management team have concluded that Suntech's interim condensed financial information for 2010, 2011 and first quarter 2012, and its annual consolidated financial statements for 2010 and 2011, together with the accompanying reports of Suntech's independent registered accounting firm for 2010 and 2011, should not be relied upon by investors,’ the company says.
GSF caused additional trouble for Suntech earlier this year by failing to comply with project permitting processes in Italy. In its financial report, Suntech reports that investigations into GSF subsidiaries by Italian authorities have yet to result in any charges.
‘Suntech has been advised that the GSF officers are vigorously contesting the charges and believe that the plants at issue are in compliance with Italian law,’ the company says, adding that it is not involved in these proceedings.
Legal fees from the GSF matters weighed on Suntech's third-quarter results; the company reported a $6 million impact on its operating expenses. Meanwhile, PV module shipments declined approximately 10% from the second quarter, and revenues were down approximately 18%.